News Article
June 29, 2010

Energy Efficiency Policy in the European Union

Energy Efficiency Policy in the European UnionEnergy efficiency has long been an integral component of the European Union’s common energy policy. Though policy emphasis on energy efficiency has waxed and waned over the years in deference to shifts in overarching strategies and goals, the EU has once again made energy efficiency a top priority. Early in 2007, the EU proposed a new energy policy as a “first resolute step towards becoming a low-energy economy.”1 According to the European Commission, “The policy puts energy back at the heart of EU action… The aims of the policy are supported by market-based tools (mainly taxes, subsidies and the CO2 emissions trading scheme), by developing energy technologies (especially technologies for energy efficiency and renewable or low-carbon energy) and by Community financial instruments.” 2 

Current EU policy on energy efficiency is based on the Action Plan for Energy Efficiency adopted in 2006.3 This six-year Action Plan, which runs from January 1, 2007 to December 31, 2012, is aimed at achieving a 20 percent reduction in energy consumption by 2020. It includes dozens of proposed measures to improve the energy performance of products, buildings and services, to improve the yield of energy production and distribution, to reduce the impact of transport on energy consumption, to facilitate financing and investments in efficiency, to encourage and consolidate rational energy consumption behaviour and to step up international action on energy efficiency.4

The 20 percent reduction in energy consumption by 2020 parallels other targets set by the European Commission: a 20 percent reduction in greenhouse gas emissions (compared to 1990 levels) and 20 percent of electricity sourced from renewable energy, both by 2020.5 (It should be noted that, while these later targets are legally binding, the energy efficiency target is not.)

The biggest energy savings expected to result from implementation of the 2006 Action Plan are in commercial and residential buildings, with savings potential estimated at 30 and 27 percent respectively. Next in terms of estimated potential savings are: transportation (26%), and manufacturing (25%). Reaching these potentials would correspond to overall savings estimated at 390 million tonnes of oil equivalent (Mtoe) each year, or €100 billion per year up to 2020. They would also help reduce CO2 emissions by 780 million tonnes per year.6

Many of the proposed measures of the Action Plan, however, have yet to be adopted, and the Commission is now committed to reviewing the effects of the 2006 Action Plan and making new proposals for a European energy efficiency strategy—expected toward late 2010 or early 2011. A proposal uncovered at the end of 2009 suggests that the Commission does not expect Europe to reach its 20 percent targets without binding energy saving targets and a renewed focus on buildings, transport, and energy supply sectors. The proposals also move away from promoting energy efficiency using environmental arguments to ones which focus more on job creation and the security of supply. This debate around binding energy saving targets will be the key discussion around the shape of a new Action Plan.

In addition to an overarching Action Plan, the EU has also pursued sector-specific approaches to energy efficiency. In the buildings sector, Directive 2002/91/EC7, the Energy Performance of Buildings Directive (EPBD), sets minimum standards for the energy performance of new buildings and existing buildings that are subject to major renovation. The Directive requires all EU countries to enhance their building regulations and to introduce energy certification schemes for buildings. All countries are also required to have inspections of boilers and air-conditioners.8

In November of 2008, the European Commission proposed a new, more ambitious EPBD. According to the Commission, the design of the EPBD (which is expected to be adopted soon) is “to clarify and simplify certain provisions, extend the scope of the Directive, strengthen some of its provisions so that their impact is more effective, and to provide for the leading role of the public sector.” 9 (For a comparison of the proposed changes to the 2002 EPBD, see The International Network for Sustainable Energy’s Energy Performance of Buildings Directive - Recast 2008-2009.)

Other sector-specific directives aimed at energy efficiency include:

  • Energy services: Directive 2006/32/EC10 to encourage energy efficiency through the development of a market for energy services and the delivery of energy efficiency programs and measures to end users.11 This Directive is also due to be reviewed will also over the course of this Commission.

  • Transportation: Directive 2009/33/EC12 to promote and stimulate the development of a market for clean and energy-efficient vehicles.13 The Commission is expected to launch an initiative on energy efficient vehicles sometime in 2010.

  • Energy-using products: Directive 2005/32/EC,14 a framework directive to define the principles, conditions and criteria for setting environmental requirements for energy-using products. Mandatory requirements for specific products will be instituted at a later stage. In principle, the framework directive applies to all energy-using products placed on the market, from appliances to computers to air conditioning systems. It also covers parts intended to be incorporated into products placed on the market.15

With respect to the energy supply sector, the European Strategic Energy Technology Plan (SET-Plan)16 includes within its scope a focus on smart grid development. The Commission is also examining how information technologies can improve the energy efficiency of a variety of sectors. The EU is devoting considerable financial resources to promoting new energy efficient technologies through research funding and the SET-Plan, and the use of structural funds and European Investment Bank money to fund actual projects.

Therefore, while there has been, historically, a considerable focus on energy efficiency within the EU, the coming months should usher in a profound acceleration in activity, as policymakers consider binding energy saving targets and other measures that will create numerous opportunities for business and society at large.

  June 2010



1 European Commission, European Energy Policy []

2 Ibid

3 European Commission, Action Plan for Energy Efficiency: Realising the Potential []

4 European Commission, Action Plan for Energy Efficiency (2007-12) []

5 European Commission, Energy Efficiency for the 2020 Goal []

6 European Commission, Action Plan for Energy Efficiency (2007-12), note 4

7 DIRECTIVE 2002/91/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 December 2002 on the energy performance of buildings []

8 European Commission, Concerted Action, Energy Performance of Buildings Directive []

9 PROPOSAL FOR A DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the energy performance of buildings (recast) []

10 DIRECTIVE 2006/32/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 5 April 2006 on energy end-use efficiency and energy services and repealing Council Directive 93/76/EEC []

11 European Council for an Energy Efficient Economy, The Energy End-use Efficiency and Energy Services Directive []

12 DIRECTIVE 2009/33/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 23 April 2009 on the promotion of clean and energy-efficient road transport vehicles []

13 European Commission, Clean and energy-efficient road transport vehicles []

14 DIRECTIVE 2005/32/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 6 July 2005 establishing a framework for the setting of ecodesign requirements for energy-using products and amending Council Directive 92/42/EEC and Directives 96/57/EC and 2000/55/EC of the European Parliament and of the Council []

15 European Commission, Ecodesign for energy-using appliances []

16 European Commission, Towards a low carbon future: European Strategic Energy Technology Plan []. See also: “European Commission smart grid task force sets goals,” Smart Grid Today, November 10, 2009 and European Commission, European Smart Grids Technology Platform []

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